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TVA contends that such a sale was not allowed, and Haney's Nuclear Development LLC didn't meet the terms of the contract, because the transfer of a construction permit for Bellefonte was not approved by the U.S. Nuclear Regulatory Commission. TVA began work on Bellefonte and obtained a construction permit in the 1970s, although construction was halted on the plant in 1988 when power demand slowed and the cost of completing the plant rose more than originally forecast.

Haney submitted an application last month to transfer the deferred construction permit on the plant from TVA to Nuclear Development. But the NRC is still reviewing the adequacy of the buyers to complete the project. NRC officials said it will likely takes months to review the permit transfer.

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Haney said last month he was surprised that TVA required the license transfer for the plant sale, noting that any licensing of the plant will ultimately require additional extensive review by federal regulators.

But TVA spokesman Jim Hopson said today that "Nuclear Development's lack of diligence in pursuing their obligation to meet the requirements of the Atomic Energy Act after the nearly 25 months of their purchase contract did not make granting an additional extension in the best interest of those we serve." TVA contends it cannot legally sell a nuclear power plant unless the NRC authorizes the license or construction permit transfer.

Haney submitted the winning bid in a November 2016 auction of the Bellefonte plant and its 1,300 acres of assets. Haney said he planned to work to transfer the deferred construction permit for the twin-reactor plant from TVA to Nuclear Development.

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Hopson said TVA hasn't yet filed a formal response to Haney's lawsuit "but will respond before the court's deadline," likely in 2019.

In an interview last month with The Chattanooga Times Free Press, Haney questioned whether TVA is now trying to block the sale because it fears that Nuclear Development might be able to undercut TVA power rates and offer power users in the region better prices if and when the Bellefonte plant is completed.

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Estimates vary about what it would cost to complete the plant. TVA estimates it could cost more than $8 billion to finish one reactor, but Nuclear Development Chief Operating Officer Bill McCullom, a former TVA executive, estimates the Unit 1 reactor at Bellefonte could be finished for $3.5 billion.

In the meantime, TVA is keeping the deferred construction permit and the current status of the unfinished nuclear plant before proceeding with any other potential sale of the property.

"TVA remains committed to returning the Bellefonte property to productive use as soon as possible, although Nuclear Development's legal challenge could delay our intent to fulfill that goal," Hopson said in a statement today.